An electronic publisher treats available advertising space as inventory. As used herein, the term “inventory” can include available advertising space in a variety of media, including but not limited to web pages, portions of web pages, banners, buttons, pop-up windows, placement within sponsored search listings, and streaming media (including video and/or audio). Each time one of these advertisement types is played for, or presented to, a user constitutes an “impression.” The inventory of advertising space includes the capacity to render advertising in any of these formats.
The term “advertising” as used herein is not limited to commercial advertising, but may also include any purchase or donation of the ability to deliver information content of any type. For example, a public service notice or a pure entertainment streaming video that is purchased by a sponsor, but only delivers information to the recipient without asking the recipient to take any action or make any purchase would still be encompassed by the term “advertisement” as used herein.
Advertising media inventory may be divided into two general classes. The first type is “guaranteed” inventory. This inventory is generally paid for in advance and is guaranteed (by contract) to be delivered within a certain period. Because of this constraint, guaranteed inventory cannot be oversold, and an inventory management system exists to measure and regulate inventory availability. Guaranteed inventory is generally sold to large, branding-oriented advertisers who need reliable delivery to achieve their marketing goals and are willing to pay premium prices for that inventory. Guaranteed inventory is typically sold on a cost-per-impression (CPI) basis.
The second type of media inventory is “non-guaranteed”. Non-guaranteed inventory comprises the remnant of available inventory after guaranteed inventory is served. Non-guaranteed advertising is generally paid for in arrears, because it can be preempted at the publisher's discretion without violating any contractual obligation. Non-guaranteed inventory serves as a sink for excess supply and can be thought of as a “spot” or “auction” marketplace. This inventory is usually sold to smaller advertisers, often to direct marketers who wish to drive transactions rather than branding.
Non-guaranteed inventory is most frequently sold on a performance basis, meaning that the advertiser pays based only in the event of a response to an ad, rather than just for placement of that ad. This performance basis adds uncertainty to the estimation of the value (on a per-impression basis) of a media purchase.
Prior inventory management systems may include demand forecasting modules for guaranteed inventory. However, these forecasting modules only provide limited granularity or detail about the demand, e.g., only provides a forecast of the total amount of guaranteed inventory that may be needed or sold. The limited detail provided by prior systems creates difficulty in arriving at optimal pricing for the placement of advertisements that will occur in the future.
An improved demand forecasting system is desirable.